U.S. JUDGE ORDERS ELECTION AGENCY TO TIGHTEN RULES

By GLEN JUSTICE

Published: September 21, 2004

A federal judge has ordered the Federal Election Commission to enact tougher restrictions on how millions of dollars are spent on campaigns, saying that its rules have undermined the McCain-Feingold campaign finance law.

The decision affects 15 highly technical regulations governing campaign activity that, though not widely known outside the world of political operatives, serve as important guideposts for how to finance campaigns legally.

For example, one set of regulations restricts how candidates and political parties, which are subject to contribution limits, coordinate with independent advocacy groups like so-called ''527'' committees, which can raise unlimited donations.

The 157-page decision left election lawyers from both parties as well as lawmakers and commission members arguing over which regulations are now in effect for the final weeks of the presidential campaign.

The judge, Colleen Kollar-Kotelly of Federal District Court in Washington, who posted her decision on Saturday, gave little guidance on how they should proceed when she ruled on a suit brought by the law's primary sponsors in Congress. Many expect the commission to ask the court to delay the ruling until it has time to rewrite the rules as ordered or pursue an appeal.

Some lawyers and campaign finance experts said Monday that the decision immediately invalidated the commission's regulations, meaning that stricter rules outlined in the law than the commission has so far permitted would apply to this election. Others argued that the current regulations that the judge struck down could remain in force until the commission writes new ones.

The McCain-Feingold law banned candidates and political parties from collecting unlimited soft money contributions from corporations, unions and wealthy individuals.

Representative Christopher Shays, a Connecticut Republican who brought the suit, called the decision a victory for those who championed the law.

''This is a very important step in making sure the law is implemented the way it was passed,'' Mr. Shays said. ''There will be a significant tightening up of the regulations.''

The court's repudiation of the Federal Election Commission brought a new round of attacks on the agency, which has long been derided by politicians in both parties and by advocacy groups as ineffective and lacking adequate enforcement powers.

Critics contend that it was created as a toothless organization -- controlled by three Democrats and three Republicans -- so elected officials and their supporters could more easily skirt election laws.

Representative Martin T. Meehan, a Massachusetts Democrat who also was party to the suit, accused the commission of carving loopholes in the law. In a statement, Mr. Meehan called the court's opinion ''further evidence that the F.E.C. is a dysfunctional agency that does more to subvert the law than to enforce it.''

On Monday, some commission officials stood behind the regulations, which took months of meetings and feedback from the public to create. ''I was disappointed in the court ruling,'' said Michael Toner, a Republican member of the panel. ''The commission's regulations were clear and effectively implemented McCain-Feingold.''

The case is the latest round in a jousting match involving those in Congress who support the new law, members of the commission who have to enforce it and the vast community of candidates, political parties and advocacy groups who have to live by its rules.

Even after years of wrangling in Congress and major court challenges that were settled when the Supreme Court upheld most of the law last year, the new law is still the subject of numerous lawsuits and complaints by players across the political spectrum.

Among them was this suit, which was originally filed in 2002 by Mr. Shays and Mr. Meehan, who challenged 19 regulations the election commission passed as part of putting the McCain-Feingold law into effect. The law is known by the names of its Senate sponsors, John McCain, Republican of Arizona, and Russell D. Feingold, Democrat of Wisconsin, who filed briefs in support of the suit.

Of particular concern is the language governing coordination. Campaign finance laws have for years restricted candidates and political parties from harmonizing their activities with advocacy groups.The independent groups known as 527 committees that have so far been allowed to operate under the new campaign law have been an important dynamic this year, and the court's ruling adds yet more uncertainty about how those groups will operate and the impact they will have.

The commission wrote pages of complicated rules to define coordination between the campaigns, the parties and independent groups like 527's, creating a number of tests that deal with everything from the conduct of political operatives to the content of advertisements.

But the rules were criticized by supporters of the new law, who said they did not adequately reflect the law's intent to prevent coordination.

The coordination rules have become particularly important in this year's election, after 527 committees began collecting tens of millions of dollars to mobilize voters and broadcast television commercials supporting President Bush or his Democratic opponent, Senator John Kerry. The Bush and the Kerry campaigns have accused each other of illegally coordinating with the groups that support them.

In the wake of the judge's ruling, many experts in campaign finance are now asking which set of rules apply to candidates and others now campaigning. Some argue that the regulations passed by the commission should remain intact, at least for this year's race and until new ones are created.

They note that the judge's ruling did not expressly prevent the commission from enforcing these regulations, even as it asked the commission to recast them.

''The alternative is that there are no regulations, and that can't be the right answer,'' said Ellen Weintraub, a Democrat who is the commission's vice chairwoman. ''That would leave us in chaos. The worst possible result is chaos six weeks before an election.''

Mr. Toner, the Republican commissioner, said that ''if history is any guide, when the law is uncertain, there is more potential for people to push the envelope.''

But others say that the regulations are invalid and that the law of the land is now simply the language that Congress passed in the McCain-Feingold law, supplemented by campaign finance regulations that were not struck down by the decision.

''These regulations are now unlawful and the F.E.C. cannot enforce unlawful regulations,'' said Fred Wertheimer, president of Democracy 21, which strongly supports the McCain-Feingold law. ''No one should attempt to exploit this F.E.C.-created loophole.''

Some lawyers said that the situation would become clearer soon, after commission members decided how they were going to proceed.

''The ball is now in the F.E.C.'s court,'' said Jan Witold Baran, a Republican elections lawyer. ''But that doesn't answer questions for people in the political process on where to go for guidance on how to comply with McCain-Feingold. My immediate advice is to at least comply with the old regulations.''

Those who advocate tighter campaign finance laws say the ruling bolstered other efforts under way to tighten the law with respect to 527 committees.